105% Home Loan Eligibility: How to Qualify and Be Eligible for a 105% LVR Loan

A 105% LVR loan means you’re borrowing more than the property’s value, usually to cover the purchase price plus some upfront costs. That’s why 105% home loan eligibility is stricter than standard lending.

Respectable Lenders like Empower Money want strong repayment capacity, clean credit conduct, and a property they can value confidently. In Australia, most 105% pathways are either a specialist “no deposit” product or a guarantor structure.

Key takeaways

Eligibility is decided by serviceability first, then credit conduct, then the property and security structure.
105% lending is usually niche, with postcode and property type limits.
Some lenders use a split structure (first mortgage plus a second loan) rather than one single 105% loan.
If you cannot qualify, a 5% deposit pathway through the Home Guarantee Scheme or a standard low deposit loan can be more realistic.

What 105% LVR Really Means

LVR is the loan amount divided by the lender’s assessed property value. If the lender values the home at $800,000 and you borrow $840,000, that’s 105% LVR.

The practical point: the lender is exposed if prices fall or the valuation comes in lower than the contract price. So 105% lending tends to come with tighter rules around income, spending, credit history, and acceptable properties.

The Main Ways Buyers Get to 105% Borrowing

Specialist 105% products (no deposit, no LMI claims vary by product)

Some lenders market “no deposit” lending up to 105% through a split structure. For example, one approach is an 80% first mortgage plus a second loan that lifts total funding to 105%. This can be framed as a way to cover the purchase and some costs in one plan. These products commonly set limits like metro-only postcodes and full documentation requirements.

Guarantor structures that cover the shortfall

A more common way to reach “effective 105%” is a family guarantee. The borrower takes a main loan secured by the new home, and the guarantor’s property secures the extra portion. It’s usually a limited guarantee, not a guarantee for the full loan. Many lenders allow the guarantor to be released once the borrower’s LVR drops under 80%.

A different “no deposit” method that is not a 105% LVR home loan

Some services offer a separate “deposit loan” paired with an 80% mortgage. That can feel like “no deposit” from the buyer’s point of view, but it’s not the same thing as being approved for a 105% LVR mortgage. The eligibility test still focuses on whether you can service both debts.

105% Home Loan Eligibility Checklist

This is what tends to decide outcomes, in order.

Serviceability and income stability

If your repayments only “just” work on paper, 105% lending usually fails the stress test. Lenders want confidence you can repay even if rates rise or expenses increase. Expect a full review of:

Income consistency (role, industry, probation status, overtime history, bonuses)
Ongoing commitments (credit cards, personal loans, car finance, HECS HELP, childcare)
Spending patterns (what your bank statements actually show, not what you estimate)

Credit history and conduct

105% lending leaves no room for messy credit, so you’ll improve eligibility if you have no recent missed repayments, defaults, or collection listings, low credit card utilisation (not maxed out), minimal recent credit enquiries, and stable address and employment history. A single issue isn’t always fatal, but the higher the LVR, the less tolerant lenders become.

Debt-to-income pressure

Even if you earn well, high debt relative to income can block you. This matters even more for bank lenders from 1 February 2026, when APRA’s debt-to-income limits start affecting how much high DTI lending ADIs can write. In plain terms, if your total debt is at or above 6 times your income, it may be harder to fit within lender appetite, even if you technically service the loan.

Genuine savings and buffers

Even when a product says “no deposit,” lenders still like to see financial discipline and a cash buffer. A buffer matters because there are always costs that land outside the loan structure, plus you want breathing room after settlement.

Security and property acceptance

High LVR lending is picky about what you buy. Common friction points include:

Small apartments or high density stock where valuations can be conservative
Unusual construction, rural or niche properties, or anything hard to resell
Locations where the lender applies stricter postcode rules
Contracts with unusual terms, incentives, or vendor rebates that complicate valuation

If the valuation comes in low, your LVR jumps overnight. That can turn “approved” into “not eligible” fast.

Eligibility Differences Between Specialist 105% and Guarantor Loans

Here’s a practical comparison you can use when deciding which path is even worth pursuing.

Area	Specialist 105% product	Guarantor 105% structure
Security	Often split loan with a second facility	Extra security comes from guarantor property
Typical buyer profile	Strong income, clean credit, tight property rules	Strong borrower plus guarantor with usable equity
LMI	May be avoided depending on structure	Often avoided because extra security reduces LMI need
Biggest approval risk	Valuation, postcode rules, fees, serviceability	Guarantor eligibility, family risk, valuation
Exit plan	Usually refinance once LVR improves	Release guarantor once LVR is under 80%

What Usually Makes Buyers Ineligible

These are the most common decline triggers in 105% scenarios:

Repayments only work if you cut living costs unrealistically
Too much revolving debt (large credit limits, high utilisation)
Recent credit damage or heavy credit enquiry activity
Property type or postcode falls outside policy
Valuation comes in under contract price
No buffer left after settlement, even if the loan can cover “costs”

How to Improve Your Home Loan Eligibility Without Waiting Years

Reduce credit card limits and pay down revolving debt
Stop applying for credit and keep enquiries low for a few months
Stabilise income and avoid job changes right before applying
Build a cash buffer, even if it’s not a “deposit”
Target properties that valuers can support, not niche stock

What to Prepare Before You Apply

ID documents
Recent payslips and employment details
Bank statements that show income and real spending
Details of every liability (including credit card limits)
Contract of sale when you have a property
For guarantors, proof of equity and loan statements on the guarantor property

If You Don’t Qualify, What to Consider Instead

If 105% is out of reach, don’t force it. In Australia, many buyers are better served by a 5% deposit pathway through the Home Guarantee Scheme (no LMI under the scheme, subject to eligibility), a standard 90% to 95% LVR loan where you pay LMI but stay within more mainstream lending policy, or using a guarantor at a lower effective LVR so the family risk is smaller and the exit is faster.

Conclusion

105% home loan eligibility is not about clever marketing tactics. It’s about whether a lender believes you can repay comfortably, your credit conduct supports the risk, and the security structure makes sense if the valuation moves.

If you qualify, go in with a clear exit plan to reduce LVR quickly. If you do not, a 5% pathway or a standard low deposit loan can be the smarter, safer route.

FAQs

Can I get a 105% LVR loan without a guarantor?

Yes, but it’s usually limited to specific lender products with strict criteria, and often a split structure rather than a single 105% mortgage.

Does 105% include stamp duty and legal fees?

Sometimes it can, depending on the product structure and lender rules. Never assume. You need the lender to confirm exactly what “costs” are included.

Will I pay LMI on a 105% loan?

Often not in guarantor structures because the extra security reduces the lender’s LMI need. For specialist products, it depends on how they structure the lending.

What credit score do I need for 105% lending?

There’s no universal number. In practice, lenders want strong credit conduct with minimal recent issues. Some specialist lenders state minimum scores in their eligibility notes.

How do families get released from a guarantor?

Typically once the borrower’s loan is under 80% of the property value (based on valuation), and the lender’s release process is met.

Sources

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